EBA欧洲银行-Report-on-colleges-functioning-2017_33页_1mb

Summary of EBA Report on the Functioning of Supervisory Colleges in 2017

Core Content

The European Banking Authority (EBA) conducted a comprehensive monitoring activity of supervisory colleges in 2017, focusing on the functioning and effectiveness of these colleges in supervising large cross-border banking groups across the European Economic Area (EEA). The EBA identified 20 colleges for close monitoring and an additional 54 for thematic or selected monitoring, covering both EEA and third-country banking groups.

The report highlights several key areas of focus: organisational aspects of college work, interactions among supervisors, group risk and liquidity assessments, and the process and content of joint decisions on capital and liquidity. It also discusses the EBA's role in promoting coordination and the use of tools to support college activities.

Main Observations

1. Improvements in College Functioning

• Significant improvements were noted in college interactions, responsiveness, and the quality of joint decision documents.
• Most colleges maintained frequent interactions, often on a quarterly basis, and were responsive to recommendations.
• The EBA encouraged better cooperation through setting expectations and providing guidance, which helped enhance the overall functioning of supervisory colleges.

2. Organisational Aspects

• Mapping of Group Entities: Most colleges followed the harmonised mapping template, but some lacked completeness in reporting non-EEA entities or used vague criteria for assessing significance.
• Written Coordination and Cooperation Arrangements (WCCA): Most colleges had finalised their WCCA, though some were still in the process. The EBA noted that more detail was needed on observer participation and cooperation with resolution authorities.

3. Supervisory Examination Programme (SEP)

• The SEP was generally completed in a timely manner, allowing for effective planning and implementation of supervisory activities.
• Joint areas of focus were increasingly identified based on group risk assessments.
• While most SEPs were still a compilation of individual SEPs, more colleges adopted joint onsite or offsite activities in 2017.

4. Quality of College Meetings

• The quality of meetings was assessed as 'good' in most colleges, with late distribution of presentations being the main issue affecting the 'satisfactory' rating.
• Good practices included the use of structured outlines for host presentations and the inclusion of concrete topics for bank presentations, which improved efficiency and focus.

5. Responsiveness of Colleges

• 84% of colleges showed active and responsive engagement with EBA staff.
• Only a few colleges failed to follow up on recommendations or share assessments with other members, which the EBA recommended improving.

6. Group Risk and Liquidity Risk Assessments

• Risk assessments were generally well-drafted and provided a good summary of supervisory findings.
• Key characteristics of effective reports included a forward-looking perspective, distinct conclusions on risks and vulnerabilities, and inclusion of supervisory measures.
• Mandatory annexes were not always shared in a timely manner, particularly in some colleges assessed as 'satisfactory with compliance issue', which affected the transparency and input into joint decisions.

7. Joint Decisions on Capital and Liquidity

• The process for reaching joint decisions was generally improved, with more colleges distributing draft documents before meetings.
• The statutory timeframe for liquidity joint decisions was stricter (1 month) than for capital (4 months), which led to lower compliance rates for liquidity decisions.
• Some colleges faced challenges in timely distribution of draft joint decisions and in initiating discussions or communications on proposed requirements.

8. Content of Joint Decision (JD) Documents

• JD documents for capital were well-reasoned and clearly referenced SREP conclusions.
• JDs for liquidity were less robust in reasoning and lacked detailed subsidiary-level information.
• The EBA recommended further improvements in the reasoning and transparency of JD documents, especially in areas such as economic capital calculation and liquidity stress testing.

Key Topics for Supervisory Attention

The EBA identified four key topics for supervisory attention in 2017:

1. Non-Performing Loans (NPLs) and Balance Sheet Cleaning
2. Business Model Sustainability
3. Operational Risk (including Conduct Risk and IT Risk)
4. Comparability of Risk-Weighted Assets (RWAs) and Use of EBA Benchmarks in SREP

Most colleges addressed these topics in their interactions, with less focus on the comparability of RWAs.

EBA Tools and Training

• The EBA used tools such as the Colleges Newsletter and online training to support college functioning.
• These tools were instrumental in improving the quality of interactions and the reasoning of joint decisions.

Conclusion

Overall, the functioning of supervisory colleges in 2017 showed marked improvements in communication, coordination, and the quality of supervisory activities. However, there are still areas needing attention, such as the timely sharing of mandatory annexes, the robustness of liquidity JD reasoning, and the need for more structured and consistent cooperation mechanisms. The EBA continues to play a crucial role in guiding and supporting the development of effective supervisory colleges across the EU.